Are there any exceptions to the restriction on operating a competing restaurant business after the Development Term expires for Chicken Guy?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Following the expiration or earlier termination of the Development Term, this restriction shall apply within the Development Territory, within 2 miles of the border of the Development Territory and within 2 miles of any then-existing Chicken Guy!
Restaurant, except as otherwise approved in writing by Chicken Guy.
This restriction shall not apply to Developer's existing restaurant or foodservice operations, if any, which are identified in the attached Data Sheet, nor shall it apply to other restaurants operated by Developer that are franchised by Chicken Guy or its affiliates.
- (3) If any part of these restrictions is found to be unreasonable in time or distance, each month of time or mile of distance may be deemed a separate unit so that the time or distance may be reduced by appropriate order of the court to that deemed reasonable.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, there are specific exceptions to the restriction on operating a competing restaurant business after the Development Term expires. The restriction applies within the Development Territory, within 2 miles of the border of the Development Territory, and within 2 miles of any then-existing Chicken Guy restaurant. However, this restriction does not apply to the Developer's existing restaurant or foodservice operations, if any, which are identified in the attached Data Sheet, nor does it apply to other restaurants operated by the Developer that are franchised by Chicken Guy or its affiliates.
Furthermore, the FDD states that if any part of these restrictions is found to be unreasonable in time or distance, each month of time or mile of distance may be deemed a separate unit so that the time or distance may be reduced by appropriate order of the court to that deemed reasonable. This clause provides a safeguard against overly broad or restrictive interpretations of the non-compete agreement.
In practical terms, a Chicken Guy franchisee is generally restricted from operating a competing chicken-focused restaurant within their Development Territory and a 2-mile radius around it and existing Chicken Guy locations for one year after the Development Term. However, pre-existing restaurants owned by the franchisee and other Chicken Guy franchises they operate are exempt from this restriction. Additionally, the franchisor may provide written approval for exceptions to this restriction.